(NDE) - Indymac Bancorp - An Addition to the Hot List -

John Reese, editor of the Validea Hot List newsletter, updates investors on the performance of his Validea Hot List portfolio compared to the S&P 500 index. Take a look at the recent return figures as well as the since inception and year to date totals. Then read about one of the Hot List newbies and one of the guru strategies by which it is favored. Afterward, discover two other stocks from the Validea Hot List. The Validea Hot List Performance Since inception, the Validea Hot List has gained 164.7 percent compared with a 27.1 percent gain by the S&P 500 during the same period. Year to date, the Validea Hot List is up 19.3 percent while the S&P 500 has gained 1.9 percent. Since John Reese and his team's last issue of the newsletter two weeks ago, the Validea Hot List gained 1.4 percent, while the S&P 500 was up 0.7 percent. An Addition to the Hot List Indymac Bancorp (NDE) This is the largest savings and loan in Los Angeles County. Two guru strategies like this financial institution. One of the gurus is David Dreman. The David Dreman Strategy Mr. Contrarian, David Dreman, likes Indymac because it is large (market cap of nearly $2.8 billion), earnings have risen the past two quarters, earnings have risen faster than the S&P 500 and earnings are likely to continue to do so for the rest of the year. The strategy has four tests to see if a stock is contrarian; two of the four need to be passed, while Indymac passes three. Its price-to-book is not in the bottom 20 percent of the overall market, but the stock is in the bottom 20 percent of the market by three other criteria - P/E ratio, price-to-cash flow and price-to-dividend ratio. Of course, a stock may be out of favor for good reason, which is why the Dreman strategy looks at a number of financial criteria. Indymac passes almost all of these, including return on equity, pre-tax profit margins and yield. This is a contrarian stock with solid financials. A Sampling of the Hot List Abercrombie & Fitch Co. (ANF) is a specialty retailer that operates stores selling casual apparel, such as knit shirts, graphic t-shirts, jeans, woven shirts, shorts, as well as personal care and other accessories for men, women and kids under the Abercrombie & Fitch, abercrombie, Hollister and RUEHL brands. As of January 28, 2006, the Company operated 851 stores in the United States and Canada. During the fiscal year ended January 28, 2006 (fiscal 2005), A&F purchased merchandise from approximately 246 factories and suppliers located throughout the world, primarily in Southeast Asia and Central and South America. In fiscal 2005, the Company did not source more than 5% of its apparel from any single factory or supplier. A&F pursues global sourcing that includes relationships with vendors in 40 countries and the United States. Tower Group, Inc. (TWGP) offers a range of specialized property and casualty insurance products and services to small to mid-sized businesses and to individuals in New York State and the surrounding areas through its wholly owned subsidiaries, Tower Insurance Company of New York (TICNY), Tower National Insurance Company (TNIC) and Tower Risk Management Corporation (TRM). TICNY is a property-casualty insurance company. TNIC is a property and casualty insurance company. TRM is a non-risk-bearing insurance services company that produces, through its managing general agency, business on behalf of other insurance companies. The Company's commercial lines products provide insurance coverage to businesses, such as retail and wholesale stores, grocery stores, restaurants, artisan contractors, and residential and commercial buildings, while its personal lines products focus on modestly valued homes and dwellings. Tower operates in three segments: Insurance, Reinsurance and Insurance Services. This article highlights the commentary of John Reese for the Zacks.com audience. John Reese provides insightful analysis, market commentary, and favorite recommendations on a timely basis in "The Validea Hot List" newsletter. Try it free for 30 days and see if you can improve your investment performance. Learn more about "The Validea Hot List" and 30-Day Free Trial. And get immediate access to current issues and special reports. Here's How You Can Profit from the Pros Find out what other leading experts are saying about the market. And what stocks they are recommending. For free. Just sign up for our free email newsletter, Profit from the Pros, where we'll give you the commentary, advice, and insight from those rare few experts who consistently beat the market year in, year out. Content Courtesy: Zacks Investment Research | Blog Home| VitalStocks Home